This swap has become very common now that Grand Cherokees are being used more and more as trail vehicles. Our First ZJ was a 4l with a 242 transfer case and an aisen Warner AW4 transmission, upon purchasing the 5.9 the first change made was the replacement of the 249 with a 242 select trac transfer case. In some instances the swap will be direct, but in many cases the input shaft will need to be swapped form the 249 to the replacement T/case. Before you begin searching for a new T/case here are some tips; mid 1994 all NP cases input/sun/annulus gears were changed, they will swap from cases to case but will most likely cause serious noise and wear issues. If you have a 95+ you will want to find a 95+ t/case and likewise if you have a 93 you will want to find a 93 or older case, the split was 1994 I would venture to guess it is hit or miss which cut of gear you have. Also you can get pre 91 cases from XJ to work but may have issues with the information center, we have done one swap from an 87-89 XJ into a 1994 ZJ.
I will not detail the removal of the transfer case itself, it is fairly straight forward, plan on getting some fluid on you and the floor.
Once the case is out check the length of the input shaft, make sure it is the same length and spline count for both the 249 and the new case. If it is count yourself lucky you can reinstall the case and skip to the end of the article. If it is not the same make sure you have a clean work area, you will disassembling both cases.
A good set of snap ring pliers is a must
Start by draining both cases
remove this cover to access the rear retainer
remove all bolts holding the case together and remove the front output yoke along with the input cover and snap ring at the front of the case.
A this point you should be able to pry the case apart. Remove the chain and output shaft, this will leave the input and the sun gear it rides in. Remove the input as a unit:
Then remove the input from the sun gear, keep all shims in the order they came out
This is the input and all that will be carried over to the new case (you can also transfer the input and sun gear as a unit)
The 242/231 disassembly will be fairly similar, the rear output housing will need to be removed to access the rear snap ring for the output shaft and the shift rail will need to have the roll pin removed using an easy out. Although it is not the correct process I have removed the shift forks using two pry bars.
Once the new case is back together and bolted back into the Jeep there are a few last minute details; the shift linkage will need to be adjusted I used a couple process for this, but had the best luck putting the jeep into 2wd and shifting the T/case to 2wd then tightening the linkage and testing to make sure it fully engaged 4low and all other modes.
I then removed the VIC to set the indicator to work with the 242 remove the dash trim to access the rear of the VIC, you will find two sets of plugs red and black, disconnect whichever set is connected and connect the other set (I can't remember which was connected). You may have to dig the other plugs out from the wire loom.
Remove the shift bezel and replace with the correct 242/231 one.
We have run this case now at 7" lift with little to no vibration and no strength issues, behind the 5.9 with headers 3" exhaust, FMS injectors, FIPK with 33"s and my wife's lead foot.